Are lootboxes gambling & should games be regulated. BF2 and OW under investigation

[Krastyn]

There is a pretty obvious line, I think, which is when you exchange real money for a chance to get an item with perceived monetary value (whether you can cash it our or not).

Now you could maybe stretch the definition to extend to "buying a game and it has enemies that drop random items" but I don't think that's something anyone is interested in actually pursuing.

But that's where then companies just shift things around a bit. What if you no longer buy the loot boxes directly. What if you go the China Hearthstone model?

Also, do you then also rule that TCG's are gambling, and only 18+?

[Kathranis]

But that's where then companies just shift things around a bit. What if you no longer buy the loot boxes directly. What if you go the China Hearthstone model?

It depends on how lenient they get with it, I guess. Shifting the system from "buyable lootboxes with bonus currency" to "buyable currency with bonus lootboxes" is probably something that will fall apart if lawmakers decide to crack down even a little bit, so it's probably not going to last as a long term solution.

I think most likely you'll see lootboxes become purely earnable rewards and monetization will shift to a focus on direct purchase of items via premium currency, which has already become the norm in some games.

[Rendark]

I don't care if loot boxes are or are not gambling, i just want them gone.

[Krastyn]

It depends on how lenient they get with it, I guess. Shifting the system from "buyable lootboxes with bonus currency" to "buyable currency with bonus lootboxes" is probably something that will fall apart if lawmakers decide to crack down even a little bit, so it's probably not going to last as a long term solution.

I think most likely you'll see lootboxes become purely earnable rewards and monetization will shift to a focus on direct purchase of items via premium currency, which has already become the norm in some games.

It also becomes a question of "what's the end game?"

So you make loot boxes gambling, now TCG's, collectables, and all sorts of other things must become gambling as well. If not, WotC could have a field day in court, as how can the government realistically argue that digital MotG is gambling, but the physical version is not, especially when the physical version is way, way easier to actually monetize.

Then you also have the scenario of, what if EA just said "Alright, you need the age or majority to buy FIFA, and we will require a valid credit card to register the profile of the player to play", but everything else stays the same. How many parents would still just buy the game for their kids, or the kid just buying the game with their parents credit card? You could run into the scenario of making the "problem" worse.

[Kathranis]

It also becomes a question of "what's the end game?"

So you make loot boxes gambling, now TCG's, collectables, and all sorts of other things must become gambling as well. If not, WotC could have a field day in court, as how can the government realistically argue that digital MotG is gambling, but the physical version is not, especially when the physical version is way, way easier to actually monetize.

Then you also have the scenario of, what if EA just said "Alright, you need the age or majority to buy FIFA, and we will require a valid credit card to register the profile of the player to play", but everything else stays the same. How many parents would still just buy the game for their kids, or the kid just buying the game with their parents credit card? You could run into the scenario of making the "problem" worse.

If it extends to physical products like blind boxes or booster packs it'll probably be through regulation, I guess? Age restrictions, license required to sell, additional taxing, etc.

[ShmooDude]

Except, is that exactly what made the CS:GO skins gambling (because the skins had a definable, usable worth) which started the whole debacle in the first place?

Further, I'm not sure your reading of the act is necessarily correct with respect to needing to 'cash out' anything. Money's worth would impute to me so long as the 'prize' has a definable value it would count.
So, for example, the way I read that is if a skin costs 1350 units and you can buy a loot box for 900 units that had a chance of rolling either the 1350 unit skin the player wanted or a 500 unit cost skin that would be gaming (and thus gambling) within the meaning of the act.

I was curious and googled this and came up with a judgement. It deals with a different section but has relevance.

... "Money's worth" is a legal term of art. As Buckley J. said in Secretan v. Hart [1969] 1 W.L.R. 1599, 1603 it is an expression:-

"very familiar to lawyers as being a way of expressing the price or consideration given for property where property is acquired in return for something other than money, such as services or other property, where the price or consideration which the acquirer gives for the property has got to be turned into money before it can be expressed in terms of money."
In my opinion, "money's worth" means anything which is capable of being turned into money, such as the items of merchandise for which the plaques could be exchanged.

So I think in this case the whole "cash out" thing is applicable.

[Kithelle]

I remember when Overwatch was in beta and I criticised the whole idea of using random rewards from lootboxes and how I hated it, because traditionally games had rewarded you for feats, predictable milestones or overcoming challenges... I said how it was going to lead from one thing to another and I got criticised and ridiculed by some people as overexaggerating.

Turned out that Overwatch was one of the biggest influencers in the industry going that direction on the large scale. I mean by comparison to other games Overwatch is more tastefully done, but one thing leads to another and one thing did lead to another. Finally lootboxes are considered gambling, and people are acknowledging these skinnerbox mechanics and companies rinsing players through gambling strategies.

Question is, what worse thing will they replace it with when regulations change?

Well what I've seen a few MMOs begin to gravitate to expensive cash shop items...they take the items that were offered in these boxes and just put then in the cash shop for a nice hefty fee.

[Temp name]

I don't care if loot boxes are or are not gambling, i just want them gone.

And getting labeled gambling is probably the quickest way to make sure that happens. Any game that wants to be marketed towards <18 year olds (Most games) will no longer be allowed to feature them if they are gambling

[oplawlz]

Well what I've seen a few MMOs begin to gravitate to expensive cash shop items...they take the items that were offered in these boxes and just put then in the cash shop for a nice hefty fee.

That's fine though. There's absolutely no reason not to sell digital goods as long as it's not a 1 in x chance to get what you want. Let people decide if the skin they want is worth what you're charging.

[Kithelle]

That's fine though. There's absolutely no reason not to sell digital goods as long as it's not a 1 in x chance to get what you want. Let people decide if the skin they want is worth what you're charging.

Yeah but the problem is not all games with loot boxes are cosmetic...some have power creep.

[The Butt Witch]

It's no different than buying a Koala Kandy Kone at the corner store. You might not get the candy you want, but there's no risk of getting no candy.

- - - Updated - - -



No you don't, you still get currency.

A super tiny amount of currency, that is useless.

[Elim Garak]

So, for example, the way I read that is if a skin costs 1350 units and you can buy a loot box for 900 units that had a chance of rolling either the 1350 unit skin the player wanted or a 500 unit cost skin that would be gaming (and thus gambling) within the meaning of the act.

1. A price does not equal monetary value, also cost does not equal monetary value
2. If you cannot convert "units" into money - they are not money
3. It doesn't matter if the person spending "units" thinks it has monetary value - it doesn't
4. Nothing digital has any monetary value because it can be copied infinitely at no cost
5. You don't own anything in the game - the developer can shut it down any time and you lose everything. So whenever you spend money in the game - you should be aware that you are not getting it back - you are making a purchase. Even if you buy a loot box - it's a purchase - you are not gambling. Even though it is a gamble (I hate semantical arguments)

[jackofwind]

A super tiny amount of currency, that is useless.

Holy necro quote, come on buddy that post was from 2017.

[Krastyn]

If it extends to physical products like blind boxes or booster packs it'll probably be through regulation, I guess? Age restrictions, license required to sell, additional taxing, etc.

It won't be a matter of if. You can't regulate the digital version but not the physical version. Then you enter the awkward territory of trying to set a definition, and the constant semantics battle.

And again, considering most age verification checks for online products is simply a credit card, it would be really easy to get around any age restrictions.

[Saltysquidoon]

You enter a giant murky area by that interpretation though. Take WoW for example. Almost all loot is RNG. BoE loot can be sold on the AH for gold. You can both buy gold for money and cash out gold for money to spend on other products. So every mob you kill is gambling.

*snip*

You could also just stop selling individual skins, and make them all lootbox only. Then none of them have a "set" value.

Or you don't sell loot boxes directly, but give them out as bones for other purchases. This is what China did the Hearthstone. You don't buy backs of cards, you buy dust, and get packs thrown in for "free".

So you're left either legislating RNG out of games, or forever playing whack-a-mole.

Solid point about WoW loot, although to me that just highlights how borderline shoddy blizzard's business practices are. I do have to admit that the act as written does appear to cover such conduct though so I can't really think of a complete defence for blizzard here, although I admit I'm more familiar with Australian legislation.
I have to say personally as an Australian the WoW token lacks the element of betting required under Australian law to constitute gambling.

However both the issue with the WoW token and your further examples frankly just go to show why the house of lords is correct. The act does not conceive of or correctly regulate online video games that while not traditionally associated with gambling (such as online poker) that are attempting to use gambling to leverage profit. The need for reform is clear.

That said I'd not go as far as this "they'll have to remove all RNG" pearl-clutching. Under the act as written WoW without the token would not fall foul of the offence provisions.

Even if the government ruled tomorrow that any game with loot boxes must be rated 18+, how do you enforce age verification?

I'm not sure why you're making out like that's high bar to overcome, online gambling services have age verification requirements right now.

So I think in this case the whole "cash out" thing is applicable.

I'll trade you Lord Hope in R v Burt & Adams 1998, who adopts a more broad approach of treating anything exchanged for money and having intrinsic value (i.e. not a sham) as having money's worth.

However, both cases predate the current act and neither conceptualise digital goods (due to their age) which as I mentioned above highlight the need for legislative reform so the act is better adapted to meet the challenges of a digital marketplace.

1. A price does not equal monetary value, also cost does not equal monetary value
2. If you cannot convert "units" into money - they are not money
3. It doesn't matter if the person spending "units" thinks it has monetary value - it doesn't
4. Nothing digital has any monetary value because it can be copied infinitely at no cost
5. You don't own anything in the game - the developer can shut it down any time and you lose everything. So whenever you spend money in the game - you should be aware that you are not getting it back - you are making a purchase. Even if you buy a loot box - it's a purchase - you are not gambling. Even though it is a gamble (I hate semantical arguments)

1. What? If I purchase a hammer for $10 then its objective monetary value at the time of purchase is $10. The crown of eternal winter has a value of $15.00
2. I was just being general instead of using dollars or pounds or yen or baht also have you heard of poker chips?
3. Even if your previous argument had any legs (which it doesn't). You know all those weird currencies online stores use to chip money out of you (and encourage future purchases with wonky values) like Riot Points or V-bucks? Yeah, they have an objective value (how else could you get a refund).
4. This argument is laughably hilariously wrong on its face, unless you want to argue every piece of media on earth has no value. In which case have you heard of a little company called Disney?
5. These are two separate arguments and neither supports the other and then you argued against your own position.

[Elim Garak]

1. What? If I purchase a hammer for $10 then its objective monetary value at the time of purchase is $10. The crown of eternal winter has a value of $15.00
2. I was just being general instead of using dollars or pounds or yen or baht also have you heard of poker chips?
3. Even if your previous argument had any legs (which it doesn't). You know all those weird currencies online stores use to chip money out of you (and encourage future purchases with wonky values) like Riot Points or V-bucks? Yeah, they have an objective value (how else could you get a refund).
4. This argument is laughably hilariously wrong on its face, unless you want to argue every piece of media on earth has no value. In which case have you heard of a little company called Disney?
5. These are two separate arguments and neither supports the other and then you argued against your own position.

1. Wrong. There's nothing objective about prices. You are making a common mistake of attaching the amount paid to the value of the object bought. This mistake is used by salesmen to make bank.
2. It doesn't matter. If you can't convert it to real money - it's not money.
3. Refund - is a refund. You made a purchase and then decided to refund it and get your money back. But if you cannot convert those points into real money outside of a refund - they are not money.
4. A digital copy of a movie has no value - it's a free copy. A film it's made from - has. A digital version of the painting has no value - the real painting has. A digital copy of a song has no value - the real performance has. But it is understandable you cannot grasp this since you confuse price with value.
5. No, they are not. Purchases are not gambling.

[The Butt Witch]

Lootboxes that you purchase with real money are gambling.

THANKS AND GOODBYE!

[Stormspark]

We are not talking about hooks of lootboxes but rather if they are gambling - they are not. Gambling requires a monetary or a valuable (an asset that can be converted into money) reward, reward that is valuable in real life. When people buy a loot box to get an in-game item - they know they are not getting anything worth anything in real life. They want it - but they are not expecting it to be worth anything. They want it for vanity.

This is not gambling. The hooks of lootboxes are not different than "sale" and "discount" hooks or simple ads. They are psychological and predatory - but not gambling.

How do those EA boots taste?

Lootboxes are gambling. It's paying money for a game of chance.

[Saltysquidoon]

1. Wrong. There's nothing objective about prices. You are making a common mistake of attaching the amount paid to the value of the object bought. This mistake is used by salesmen to make bank.
2. It doesn't matter. If you can't convert it to real money - it's not money.
3. Refund - is a refund. You made a purchase and then decided to refund it and get your money back. But if you cannot convert those points into real money outside of a refund - they are not money.
4. A digital copy of a movie has no value - it's a free copy. A film it's made from - has. A digital version of the painting has no value - the real painting has. A digital copy of a song has no value - the real performance has. But it is understandable you cannot grasp this since you confuse price with value.
5. No, they are not. Purchases are not gambling.

1. Oh yes? And if you break my $10 hammer how are we going to decide how much you owe me? Spin a wheel? Combat? Or perhaps some form of arbitration where an independent third party will determine the objects objective value based on available evidence?
2. I don't know what that has to do with what I said?
3. The refund was a contextual example, the argument was the currencies used by companies (which is a predatory practice) have a value, which they do. If a $10 RP card is not worth $10 how does it exist? Let's step this down, do you know what a gift card is? You know those things with a set value that explicitly exist to be exchanged for goods and services but not legal tender? Are you seriously going to argue they don't have value?
4. This argument is so fundamentally wrong I don't know why you're persisting down this road, It makes me believe you're not arguing in good faith. Didn't you claim to be a game dev? Have you ever heard of steam?
5. If I purchase a lottery or raffle ticket I am gambling. The argument that purchases are universally not gambling is wrong on its face.

[Steelcryo]

The issue is, "Gambling" was a term created before digital goods existed. It's definition was defined around the world at the time.

So it's less an argument of if they are gambling and more of whether gambling should be redefined. Back when it was first added to the dictionary, your only choices for gambling were to pay real money for a chance at winning something. You were paying for a game of chance where you were always going to either win nothing or win a physical good which could be then sold on if you wanted, therefore it had a monetary value.

Now, you pay money for digital goods, that often cannot be sold on. So under that definition, lootboxes are not gambling. But you are still paying real money to play a game of chance.

So the debate should be whether to change the definition of gambling to put more emphasis on the "Game of chance part" being the defining factor or whether the "chance of winning money" part should be the defining factor. The former would include lootboxes, the latter would not.

Personally I think the game of chance part is the bigger issue, especially if you are still paying real money to do so even if you aren't getting a real monetary reward for winning. You are still giving money for a chance at a favourable outcome, which to me is definitely gambling. So yes, I think lootboxes should be classed as gambling.